Are Work Guarantees Damaging the Franchise Industry?
Work guarantees have become a go-to selling tool in many franchise systems across Australia and New Zealand, especially in service-based sectors like commercial and domestic cleaning. But it’s time the industry asked a difficult question: Are these guarantees doing more harm than good?
What’s being offered as “peace of mind” is often a carefully worded promise loaded with caveats. And when those caveats aren’t clearly explained, it’s not just trust that breaks down, it’s the foundation of a franchise relationship.
At TMPlus, we’ve seen how work guarantees, when poorly structured or poorly communicated, can become a source of tension, confusion, and unmet expectations. This issue affects new and experienced franchisors alike, and it’s time for greater accountability across the board.
The Real Issue Isn’t the Clause, It’s the Clarity
When done well, a work guarantee can provide early-stage stability to a new franchisee. But too often, these guarantees are packed with conditions that aren’t properly disclosed until after the contract is signed.
A common example is the non-performance clause. This allows the franchisor to reduce the guaranteed income if a job is lost due to franchisee error or customer dissatisfaction. On paper, it may be fair and legally sound, but in practice, it frequently catches franchisees off guard.
Transparency isn’t a luxury; it’s a duty. If the guarantee relies on conditions such as:
- Required acceptance of all jobs
- Minimum availability across specific hours or days
- Strict territory or location limitations
- Admin or lead-generation fees
- Reductions for customer service complaints or cancellations
…then these terms must be fully explained beforea franchisee commits, not tucked away in an operations manual or revealed during induction.
You Can’t Guarantee What You Don’t Have
In my opinion no franchisor should be offering a work guarantee unless they have that volume of work available and secured, not projected, not forecasted, but actually available. Promising $2,000 a week and delivering only $800 a month later isn’t just poor practice, it undermines the credibility of the entire model.
In many cases, we’ve seen franchisees wait several months, or even a year, before they receive the full value of what was promised. Some are forced to take on unrelated work just to survive. That’s not support, it’s a short-term marketing play that damages long-term trust.
If your system can’t deliver the full guaranteed amount from day one, you shouldn’t be offering a guarantee at all.
The Guarantee Mindset Comes at a Cost
One of the biggest problems is how normalised work guarantees have become. Prospective franchisees now ask “Do you offer a guarantee?” as a standard qualifying question, often basing their entire decision around the answer. That puts franchisors in a difficult position: offer one to stay competitive, or risk losing the lead.
But here’s the irony. Many franchisors who don’toffer work guarantees are actually doing it better. They provide high-quality training, effective marketing support, and structured onboarding that helps franchisees build their own customer base from day one. That’s business ownership, not dependency.
Franchisees who start this way often earn more over time, develop stronger customer relationships, and build greater resilience. By contrast, those entering with a fixed guarantee frequently earn less per hour and feel more like employees than business owners.
Guarantees Shouldn’t Be Used as a Marketing Tool
Work guarantees have no place in franchise marketing unless they are underpinned by real, secured work. If you have an existing client base to hand over on day one, then protecting that income for a limited period, such as three to six months, might be appropriate. But anything beyond that should be framed around capability, not promises.
Franchisors should focus on equipping franchisees with:
- High-performing marketing that delivers real leads
- Training in quoting, conversion, upselling, and retention
- Business systems that drive customer satisfaction and long-term growth
When a franchisee is involved in winning the work themselves, they value it more. They’re more likely to maintain it. And that’s how you build sustainable franchise systems, through ownership, not handouts.
A Word on Responsibility and Vulnerability
Franchising continues to be a powerful pathway for migrants, first-time business owners, and career changers in both Australia and New Zealand. But with that opportunity comes responsibility. Many prospective franchisees are unfamiliar with commercial contracts or operating risks. Some face language or cultural barriers that make it harder to assess the offer in front of them.
That’s why it’s essential to communicate clearly and early. Guarantees tied to service contracts, often with high churn rates, can be reduced at any time due to factors outside a franchisee’s control. One negative review or a customer cancelling unexpectedly can materially impact the promised income.
Yes, franchisees must ask tough questions and seek independent advice, but it’s the franchisor who must lead with integrity and transparency.
Time for Industry-Wide Accountability
This is bigger than any one business. The conversation around work guarantees is a mirror for how the franchise sector approaches trust, ethics, and long-term success.
At TMPlus, we work with franchisors to structure guarantee mechanisms that are ethical, realistic, and clearly communicated. But more often than not, we recommend against them. Why? Because we believe that real growth comes from building capability, not relying on promises.
Franchisors who lead with strong systems, robust support, and transparent communication don’t need a guarantee to sell their opportunity. And if you do? It might be time to revisit your model.
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